Prices, Self-Interests, and the "Invisible Hand" : Reviewing Ethical Foundations of Economic Concepts in Times of Crisis

In light of the recent crisis in 2008-09 the essay researches into
the relationship between ethics and economics by investigating into
the history of economic thought. The goal of the essay is to
challenge separationist views of economics and society by
demonstrating that classical economists did not regard economics as
value free system that excluded guide-lines of ethical behavior.
As far as it concerned the development of economics as own branch of
thought, none of the Authors who will be quoted in this essay
&#8211; from Thomas Aquinas in the 13th century to John Locke,
Bernard Mandeville, Jeremy Bentham and Adam Smith in the 17th and
18th centuries &#8211; explicitly denied the existence of a
given set of social, moral (and very often religious) values as
precondition for the functioning of the economy. Their belief in the
necessity of moral values may help to understand why scholars like
Smith and Bentham could have faith in the stability of the liberal
systems they promoted. Since both scholars had witnessed a number of
crises in the 18th century such as the &#8220;South Sea
Bubble&#8221; in England (1720), the &#8220;Mississippi
Bubble&#8221; in France (1720), the
&#8220;Wissel-ruiterji-Crisis&#8221; in the Netherlands
(1763-1773) and the &#8220;Canal Mania&#8221; again in
England (1772-1797) , their conclusions concerning the
self-organizational power of markets could well have been different.
The fact that in light of these crisis former scholars did not
reject but rather promoted liberal economic concepts demonstrates
their trust in the social abilities of men. This essay argues that
this trust was not solely based on economic but also on ethical
dimensions of individual behavior.